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E-Business Chapter 1

E-commerce Developments and Themes- 2003
Use of the Internet to conduct commerce
deepening of e-commerce channel
Broadband and wireless Internet access
refined e-commerce business models (→ higher levels of profitability) But at societal level: continued conflict over copyrights, content regulation, taxation, privacy, and Internet fraud and abuse. E-commerce

E-commerce involves digitally enabled commercial transactions between and among organizations and individuals → Digitally enabled transactions: all transactions mediated by digital technology → Commercial transactions: exchange of value across organizational or individual boundaries in return for products or service.We use the term e-business to refer primarily to the digital enablement of transactions and processes within a firm, involving information systems under the control of the firm.

E-business does not include commercial transactions involving an exchange of value across organizational boundaries Debate about meanings and limitations of terms e-commerce and e-business

Why Study E-commerce
E-commerce technology is different and powerful
E-commerce has challenged traditional business thinking and has a number of unique features

Seven Unique Features of E-commerce Technology and Their Significance 1.Is ubiquitous (available always + everywhere)
2.Offers global reach
3.Operates according to universal standards (lowers market entry for merchants and search costs for consumers) 4.Provides information richness (more powerful selling environment) 5.Is interactive (can simulate face-to-face experience on global scale) 6.Increases information density

7.Permits personalization/customization

Types of E-commerce

Classified by nature of market relationship

Involves online businesses attempting to reach individual consumers
Involves businesses focusing on selling to other businesses
Provides a way for consumers to sell to each other, with the help of an online market maker Many types of business models within this category including online retailers, content providers, portals, transaction brokers, service providers, market creators and community providers

2 primary business models within B2B:
1. Net marketplaces (includes e-distributors, e-procurement companies, exchanges and industry consortia) 2. Private industrial networks (includes single firm networks and industry-wide networks)eBay most well-known example $72-$78 billion (2002)$800 billion (2002)

Largest form of e-commerce $15 billion (by 2004)

Classified by type of technology used
Uses technology, which enables Internet users to share files and computer resources without having to go through a central Web serverUse of wireless digital devices such as cell phones and handheld devices to enable transactions on the Web Napster most well-known example

Today, Kazaa is the leading network
Problem: under attack for copyright infringementMost widely used in Japan and Europe (especially Finland) Expected to grow rapidly in U.S. over the next five years.

Growth of the Internet
The Internet is a worldwide network of computer networks built on common standards Internet was first created in 1960s
Web is the most popular service on the Internet

Spider Webs, Bow Ties, and Scale-Free Networks
Small world theory of Web (every Web page is thought to be separated from any other Web page by a small number of clicks) has been debunked by recent research Web has “bow-tie” form with a strongly connected component, In pages,Out pages, tendrils and tubes. Web = “scale-free network” with “very connected super nodes”

Origins and Growth of E-commerce
Precursors to e-commerce include
1970s Baxter Healthcare (in, used telephone-based modems to reorder supplies; in 1980s, became a PC-based remote order entry system)
1980s Electronic Data Interchange (EDI)...
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